FSCS review is what brokers have been waiting for
Bring out the champagne glasses again and celebrate another victory. Because despite what has been a difficult financial year for brokers, there has been plenty to cheer about on the regulatory front. It started with a triumph over commission disclosure, then the FSA backed down on its fees & levy proposals. But a review of the FSCS could just be the icing on the cake.
The review, a comprehensive reassessment of the controversial system loathed by brokers, could bring further relief to brokers who pay huge fees and are liable for compensating a failed bank.
Broker Network chief executive Grant Ellis said it was “great news for the lobby." “Common sense looks like it has an opportunity to prevail. I just hope that they do take this opportunity now.”
He hopes that the FSA goes one step further and amends the system so that a failed insurer is also not compensated by brokers. “The ideal outcome is to have brokers compensating their own sector. We should pick up in our sector.”
Steve White, head of compliance and training at Biba says it is likely that the review, described as “fundamental”, will result in changes for brokers in the coming years.
He stated that the UK is only state in Europe with a compensation scheme that has cross subsidisation within its compensation arrangements. “We remain very unhappy with the current arrangements,” he said.
IIB chief executive Barbara Bradshaw, who claims the trade body has been fighting the issue for three years, hopes the industry can pull together. “At least we won’t be fighting this one alone,” she said. “We want to get brokers in one individual pot. I hope this time it will be a bit more of a fairer result for brokers.”
See story: Brokers celebrate as FSA does U-turn on mad charges
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